WASHINGTON: Treasury Secretary Timothy Geithner produced his financial stability plan yesterday, saying the Treasury and other federal agencies will partner with private capital to create a fund for troubled bank assets that could produce up to $1 trillion in financing capacity. Geithner outlined the rough details of the government’s new plan to rescue the financial industry and restart stalled credit markets, saying his and other agencies will partner with private capital to get the job done.
Building on President Barack Obama’s commitment to “do whatever it takes” to stabilize the financial system and protect consumers, Geithner warned that the administration’s strategy will “cost money, involve risk and take time.”
Along with new programs to prevent home foreclosures, restore confidence in the markets and create public-private partnerships to boost lending, the financial stability plan will institute a new era of accountability, transparency and conditions on financial institutions receiving funds.
The plan, Geithner said, will do four things: For the first time federal bank regulators will come together to institute uniform standards to help clean up and strengthen banks, and conduct “stress tests” to ensure the nation’s largest banks can withstand a worsening economy.
Revitalize lending and increasing much-needed credit flowing to consumers and businesses, the Treasury and the Fed are creating a new consumer business lending initiative to leverage up to $1 trillion to kick-start the secondary lending markets, which will bring down borrowing costs for responsible borrowers and help get credit flowing again.
To get financial markets working again, they will create a new public-private investment fund to provide government capital and financing to leverage private capital to buy up the “toxic assets” that are dragging down lending.
And, to keep people in their homes and curb the housing crisis, the Treasury will work with the Federal Reserve to commit $50 billion to reduce monthly payments and establish loan modification guidelines for government and private programs.
Stocks declined significantly as Geithner outlined the Obama administration’s plan to overhaul the bank bailout plan, including making at least $1 trillion available to boost lending.
The dollar did get an early boost against most foreign currencies yesterday — but US treasuries rose on speculation that Geithner’s plan to rescue the banking system would prove inadequate, boosting demand for the safety of government debt.
Obama, in his first news conference Monday night, pressured lawmakers to approve a massive economic recovery bill, and turned offensive against Republicans who try to “play the usual political games.”
He said the recession has left the nation so weak that only the federal government can “jolt our economy back to life.” And he declared that failure to act swiftly and boldly “could turn a crisis into a catastrophe.” “The party now is over,” he said.
WASHINGTON: Treasury Secretary Timothy Geithner produced his financial stability plan yesterday, saying the Treasury and other federal agencies will partner with private capital to create a fund for troubled bank assets that could produce up to $1 trillion in financing capacity. Geithner outlined the rough details of the government’s new plan to rescue the financial industry and restart stalled credit markets, saying his and other agencies will partner with private capital to get the job done.
Building on President Barack Obama’s commitment to “do whatever it takes” to stabilize the financial system and protect consumers, Geithner warned that the administration’s strategy will “cost money, involve risk and take time.”
Along with new programs to prevent home foreclosures, restore confidence in the markets and create public-private partnerships to boost lending, the financial stability plan will institute a new era of accountability, transparency and conditions on financial institutions receiving funds.
The plan, Geithner said, will do four things: For the first time federal bank regulators will come together to institute uniform standards to help clean up and strengthen banks, and conduct “stress tests” to ensure the nation’s largest banks can withstand a worsening economy.
Revitalize lending and increasing much-needed credit flowing to consumers and businesses, the Treasury and the Fed are creating a new consumer business lending initiative to leverage up to $1 trillion to kick-start the secondary lending markets, which will bring down borrowing costs for responsible borrowers and help get credit flowing again.
To get financial markets working again, they will create a new public-private investment fund to provide government capital and financing to leverage private capital to buy up the “toxic assets” that are dragging down lending.
And, to keep people in their homes and curb the housing crisis, the Treasury will work with the Federal Reserve to commit $50 billion to reduce monthly payments and establish loan modification guidelines for government and private programs.
Stocks declined significantly as Geithner outlined the Obama administration’s plan to overhaul the bank bailout plan, including making at least $1 trillion available to boost lending.
The dollar did get an early boost against most foreign currencies yesterday — but US treasuries rose on speculation that Geithner’s plan to rescue the banking system would prove inadequate, boosting demand for the safety of government debt.
Obama, in his first news conference Monday night, pressured lawmakers to approve a massive economic recovery bill, and turned offensive against Republicans who try to “play the usual political games.”
He said the recession has left the nation so weak that only the federal government can “jolt our economy back to life.” And he declared that failure to act swiftly and boldly “could turn a crisis into a catastrophe.” “The party now is over,” he said.
